Investors look to AI-darling Nvidia’s earnings as US stocks rally wobbles

Bullish investors are hoping Wednesday’s earnings report from chip heavyweight Nvidia (NVDA.O) can rejuvenate a U.S. stocks rally that has stumbled in recent weeks.

Nvidia shares have tripled in 2023, underscoring how a rebound in megacap stocks and excitement over the business potential of artificial intelligence have helped propel the S&P 500 (.SPX) to a 14% gain this year.

The chipmaker’s year-to-date increase has led gains among the so-called Magnificent Seven group of megacap stocks, which also include Apple (AAPL.O) and Microsoft (MSFT.O). The group’s collective rise was responsible for roughly two-thirds of the S&P 500’s increase through July.

Yet the broader equity rally has recently faltered, with the benchmark index off more than 4% in August as soaring Treasury yields threaten to dull the allure of stocks. The market’s turbulence is intensifying focus on Nvidia’s fiscal second quarter report, due after market close on Wednesday.

Nvidia is at the center of “two big themes the market is concerned about right now: Can Big Tech continue to lead the market, and is this AI story for real?” said Anthony Saglimbene, chief market strategist at Ameriprise Financial, which is slightly overweight the tech sector.

“A little piece of good news in a stock that has been an important driver to the market could change the sentiment,” he said.

Nvidia stunned the market with its prior report in May, when a stellar forecast sent its stock soaring 24% in one day. Following that report, the S&P 500 technology sector (.SPLRCT) rallied 8% over the next five days.

This report’s information was first seen on REUTERS; to read more, click  this link.